AOL, Inc. (NYSE:AOL) released its third quarter earnings report before opening bell this morning, posting adjusted earnings of 52 cents per share on $626.8 million in revenue, a 12% year over year increase. Analysts had been looking for earnings of 52 cents per share on $623.5 million in revenue. In the same quarter last year, AOL reported adjusted earnings of 56 cents per share on $561.3 million in revenue.
Key metrics from AOL’s earnings report
Diluted earnings were 35 cents per share, compared to 2 cents in the same quarter last year. AOL reported a 14% year over year increase in domestic multi-platform unique users. The company also said pricing growth in both display and third party platforms showed strong growth. Premium formats, including video, drove the pricing growth and global ad revenue increase, which rose by 18% year over year.
AOL said cost of revenues rose by $61 million due to a $65 million increase in traffic acquisition costs. Expense savings from job cuts partially offset that increase. Adjusted OIBDA increased 2% due to growth in total revenue.
“In Q3, AOL continued its strong growth in consumer traffic, revenue and profitability across its portfolio of assets,”” said AOL Chairman and CEO Tim Armstrong in a statement. “AOL is a leader in global content, video, mobile, and programmatic advertising and is positioned directly at the center of the most disruptive changes happening online and offline in culture and code.”
As of the end of the quarter, the company had $458 million in cash and cash equivalents. AOL paid back $105 million of its $250 million senior secured revolving credit facility. The company also issued $379.5 million in .75% convertible senior notes that mature Sept. 1, 2019.
AOL’s results by segment
The company’s programmatic search revenue climbed to 37% of its non-search advertising revenue, compared to 12% last year. Global advertising and other revenue rose from $399.7 million last year to $473.4 million this year.
AOL Properties Display revenue fell to $141.5 million, while AOL Properties Search rose 3% to $97.9 million. Third Party Platform revenue increased 44% to $215.1 million, while other revenue increased 38% to $153.4 million in the quarter. Subscription revenue fell 5% year over year.
AOL also repurchased about 1 million shares during the quarter.